RegAlert2021-12-21 | NBB_2021_24Added · Updated
Communication NBB_2021_24 / Evaluation of technical provisions for individual health insurance
The National Bank of Belgium establishes a reference scenario for individual health insurers to evaluate the prudence of medical inflation modelling assumptions used in calculating technical provisions under Solvency II. The scenario mandates a short-term approach combining European inflation swaps with a specific Belgian wedge, and a long-term Ultimate Forward Medical Inflation Rate (UFMIR) of 3.5%, derived from real GDP growth and the ECB's 2% inflation target. Insurers must apply the Smith-Wilson extrapolation method from a 20-year liquid point to a 60-year horizon and verify annually that any deviations from this reference do not result in an underestimation of technical provisions. This communication applies for the first time to figures at the reference date of 31 December 2021.
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Boulevard de Berlaimont 14- BE-1000 Brussels tel. +32 2 221 38 12 -fax +32 2 221 31 04 company number: 0203.201.340 RPM Brussels www.nbb.be NATIONAL BANK OF BELGIUM DE BELGISCHE NATIONALBANK Eurosystem Communication Brussels, 21 December 2021 Reference: NBB_2021_24 Your contact:
Frank Van Steen and Stany Zabinski tel. +32 2 221 21 23/3467 frank.vansteen@nbb.be / stany.zabinski@nbb.be Evaluation of technical provisions for individual health insurance Scope Insurance or reinsurance undertakings governed by Belgian law that are subject to the Act of 13 March 2016 on the status and supervision of insurance or reinsurance undertakings. Summary/Objective This communication describes a reference scenario that the National Bank of Belgium will use as a lower limit to assess the prudence of assumptions surrounding the modelling of medical inflation and which will serve as a basis for identifying and quantifying structural imbalances in the pricing of health insurance. Structure
- Context
- Verification and entry into force
- Methodology of the reference scenario
- Description of the reference scenario
NBB_2021_24 - 21 December 2021 Communication - Bus. 1/6
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Lineage: In force
Source: National Bank of Belgium — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works